Virus pushes Netflix valuation closer to Disney
Amazon.com Inc., Netflix Inc. and YouTube are reducing the quality of their video streams across Europe to ensure networks can handle increased usage amid the coronavirus outbreak.
The moves follow discussions between European Industry Commissioner Thierry Breton and Netflix Chief Executive Officer Reed Hastings, and with Alphabet Inc. CEO Sundar Pichai and YouTube CEO Susan Wojcicki.
The three companies, along with Facebook Inc., Microsoft Corp. and Apple Inc., use more than 43 per cent of all traffic volume on the internet, according to Sandvine, a network analysis firm. Google was the largest consumer, just ahead of Netflix in a Sandvine study last year. But recently, Google’s YouTube video service has surged ahead, Sandvine reported this week.
“While we have seen only a few usage peaks, we have measures in place to automatically adjust our system to use less network capacity,” YouTube said in a statement on Friday. “We are making a commitment to temporarily default all traffic in the EU to Standard Definition. We will continue working with member state governments and network operators to minimize stress on the system, while also delivering a good user experience.”
Amazon in a statement on Friday said it’s working with local authorities and internet operators to help mitigate any network congestion caused by Prime Video, “including in Europe where we’ve already begun the effort to reduce streaming bit rates while maintaining a quality streaming experience for our customers.”
Netflix announced Thursday it would begin reducing bit rates across all its streams in Europe for a month. “We estimate that this will reduce Netflix traffic on European networks by around 25 per cent while also ensuring a good quality service for our members,” the Silicon Valley-based company said in a statement.
The virus outbreak has shuttered schools, businesses and restaurants in much of the region, sending millions of people home -- where they’re using services like Netflix and YouTube. The amount of time people spent streaming spiked by more than 20 per cent worldwide last weekend, including more than 40 per cent in Austria and Spain. While traffic has increased, EU telecom regulators say there haven’t been any signs of congestion in Europe and operators appear able to cope with the situation.
Still, the surge has left officials looking for ways to lessen the load.
Breton said he welcomed the action taken by Netflix and YouTube “to preserve the smooth functioning of the internet during the COVID-19 crisis.”